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13 May, 2014

Chip mill to end Gippsland timber contract

The owner of the Eden woodchip mill has announced it will not be renewing its contract to purchase timber from state forests in East Gippsland, when the current agreement expires at the end of 2014.

South East Fibre Exports general manager Peter Mitchell says international market pressures are the major reason behind the decision, and that company shareholders are yet to give SEFE any final direction on its next move.

Mr Mitchell said that while the announcement is a “serious development”, it does not signal an imminent closure for the chip mill.

“International market pressures have made it difficult for us to compete by selling VicForests’ resource on the basis of price and quality,” Mr Mitchell said.

“Obviously Vietnam is exporting a lot of wood chips now and has taken over from Australia as the world’s largest exporter.

“But I can reassure people that as far as Eden goes, we won’t be closing tomorrow.

“This is a serious development, but it isn’t an imminent ‘shut-up shop’ and there have been no decisions made in terms of the people who are working here.”

In the wake of the announcement, Chipstop campaigner Harriet Swift has challenged SEFE and parent company Nippon Paper to “come clean about their future plans”.

She said the Eden woodchip mill “should close now” and cease logging operations for the good of forests and wildlife.

“Closing the chipmill now would avoid so much suffering, save valuable carbon sinks and allow the forests and the community to start the healing process after 40 years of woodchipping,” Ms Swift said.

“Almost half of SEFE’s hardwood inputs come from Victoria and it looks highly improbable that the mill could survive without the Victorian logs and sawmill chips.”

The Australian Forests and Climate Alliance (AFCA) also welcomed SEFE’s announcement, labelling it a “body blow” to the logging industry.

AFCA spokesperson Jill Redwood says it is time to follow the lead of whaling and “retire the industry to history”, and warned the logging industry against turning its focus to biomass burning.

“This is a key turning point in the history of south-east Australia’s forests,” Ms Redwood said.

“Forests as now seen as essential climate moderators and Governments should take this opportunity to re-value them as carbon stores, water production areas and as essential habitat for so much of our rare wildlife.

“The burning of forests has recently been approved by the NSW government as renewable energy, and if the forests of south-east Australia are to now be clearfelled and incinerated for electricity, it would be an act of environmental wrecking that is unequalled.”

But VicForests CEO Robert Green says there are no plans to cease logging operations, saying SEFE’s announcement has ended ongoing uncertainty and now allows the state-owned business to move towards identifying new opportunities.

Mr Green said there is still strong demand for timber produced in East Gippsland, and he is confident that the industry will continue in the region, with or without export woodchips.

“SEFE’s decision to cease taking timber from Victoria will affect the market for residual timber produced from our harvesting operations,” he said.

“SEFE has been an important part of the Victorian timber industry for decades and we understand this is a commercial decision which has been made due to a range of external factors.

“Importantly, there will continue to be a timber industry in East Gippsland, and the region will continue to benefit from the contribution made by the industry.

“There are businesses that are ready to invest in the region, and we will be working closely with industry, Government and local communities over the coming months to ensure we adjust to this change.”

But Victorian Greens leader Greg Barber disagrees, saying SEFE’s exit from East Gippsland is “the beginning of the end” for native forest logging.

Mr Barber says VicForests are “in denial”, and urged the Government to immediately put a plan in place to end native forest logging.

"VicForests is a loss-making public owned company and now it is absolutely finished,” Mr Barber said.

“They can't sugarcoat it; no one wants to buy their product and they can't make any money off it.

“Their media release shows they are in complete denial about it.

"The native forest loggers have been comprehensively beaten in the marketplace by plantation tree growers.

“Instead of throwing more taxpayer subsidies at it, the government should accept the inevitable and come up with a plan for an orderly, fair and rapid exit from native forest logging.